DEVALUATION ALARMS COLOMBIAN BUSINESS

Bloomberg Business NewsCHICAGO TRIBUNE

The Colombian government should impose trade sanctions against Venezuela to guard against a flood of imports following Monday's 41 percent devaluation of the Venezuelan currency, a business group said.

"Many Colombian products will undoubtedly be affected by this," said Javier Diaz, vice president of Colombia's National Association of Exporters.

Venezuela cut its official exchange rate from 170 bolivars to the dollar to 290 bolivars. The sharp devaluation will make Venezuelan products cheaper in foreign markets; the steel and auto industries could be hardest hit, Diaz said. Colombia already has a large trade deficit with Venezuela.

Under a free-trade deal signed among Colombia, Venezuela and Mexico, each country may impose trade sanctions against the others if it finds an industry has been badly hurt by expanding trade.